An Experimental Study on the Effects of Communication, Credibility, and Clustering in Network Games

57 Pages Posted: 15 May 2019

See all articles by Gary Charness

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics

Francesco Feri

University of London - Royal Holloway College

Miguel Meléndez-Jiménez

University of Malaga

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Cologne - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2019

Abstract

The effectiveness of social interaction depends strongly on an ability to coordinate actions efficiently. In large networks, such coordination may be very difficult to achieve and may depend on the communication technology and the network structure. We examine how pre-play communication and clustering within networks affect coordination in a challenging experimental game on eight-person networks. Free-form chat is enormously effective in achieving the non-equilibrium efficient outcome in our game, but restricted communication (where subjects can only indicate their intended action) is almost entirely ineffective. We can rationalize this result with a novel model about the credibility of cheap-talk messages. This credibility is much larger with free-form message communication than with restricted communication. We are the first to model this credibility and show, both theoretically and experimentally, an interaction effect of network structure and communication technologies. We also provide a model of message diffusion, which indeed predicts that diffusion will be more rapid without clustering and is consistent with our data.

Keywords: Networks, Clustering, Communication, Credibility, Cheap talk, Experiment

JEL Classification: C71, C91, D03, D85

Suggested Citation

Charness, Gary and Feri, Francesco and Meléndez-Jiménez, Miguel and Sutter, Matthias, An Experimental Study on the Effects of Communication, Credibility, and Clustering in Network Games (May 2019). MPI Collective Goods Discussion Paper, No. 2019/8. Available at SSRN: https://ssrn.com/abstract=3388555 or http://dx.doi.org/10.2139/ssrn.3388555

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States
805-893-2412 (Phone)
805-893-8830 (Fax)

Francesco Feri

University of London - Royal Holloway College ( email )

Royal Holloway
University of London
Egham, TW200EX

HOME PAGE: http://francescoferi.xoom.it/

Miguel Meléndez-Jiménez

University of Malaga ( email )

Malaga, Málaga 29004
Spain

Matthias Sutter (Contact Author)

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Cologne - Department of Economics

Cologne, 50923
Germany

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